The coins dying with him are actually the best case scenario for all other holders.
"Lost coins only make everyone else's coins worth slightly more. Think of it as a donation to everyone." - Satoshi Nakamoto
You can even split up your key in an M of N format so that a) no single compromised location causes loss, and b) some number of storage locations can be lost without losing your key.
Can you do that with gold? Land? Art? Cash? Bonds? Stocks? All of these rely on either securing a single location where the wealth is stored and moving to another place is either expensive, risky, or necessarily impossible (land/buildings), and/or they rely on trusting some custodian to preserve your claim on that wealth.
It's not a secret. Immutability is one of the key features and regularly advertised part of the system. So much so that when that irreconcilability is violated (e.g. rolling back the DAO hack in Ethereum) it's seen as a negative.
There might be some morons who didn't do any research before investing, but they won't be a huge loss if they sell out and stay out.
I think you're underestimating the size of this group.
Is this going to be one of this discussion where people try to pretend banks haven't existed for centuries and work very well for pretty much everyone?
Banks are example of what more-less people want from their currency. And crypto should be taking notes from CENTURIES of experiences. And not just shun it all and start from scratch.
Loosing keys to wallet is huge problem for ubiquity of crypto, and as a currency of the future it might be fatal flaw. If someone steals my IRL wallet, I call bank to cancel my cards and cry a bit about lost cash and hustle of getting all ID's etc back. If I loose crypto wallet, its gone all of it. Without proper precautions of multiple wallets and safeguards you risk loosing all your wealth in accident or robbery without much to do about it.
Given the current loss/mining rate its totally possible for BTC to become difficult to operate, but its also possible for the mining cap to be removed or for coins to be split further.
Also, there is already a trick on the lightning network to trade sub satoshis without requiring a hardfork, probabilistic payments, https://courses.csail.mit.edu/6.857/2017/project/7.pdf
The currency is digital. If the current smallest unit is worth too much, then we can just increase the decimal places.
Bitcoin is not like gold where its limited supply makes it infeasible as a currency for a large number of people because the size of the coins for everyday purchases would be too small to physically handle (hence the concurrent use of less value dense silver).
It actually matters with bitcoin because of the hard supply cap. Every lost coin shrinks the pie.
Which one would you choose?
Printing money and giving it away causes inflation because people can use it to buy things but having money printed but locked away does nothing. If this money was locked up then its not much of a change.
One of the disadvantages of crypto, I suppose, is that people could gang up and hard fork against any arbitrary billionaire even if they were alive.
This isn't unique to crypto. People have literally been ganging up against powerful individuals since pre history. Hell, it's common in the animal world. Young male lions often gang up to oust the old alpha and take over his pride.
And beyond that, our current legal system can go after any arbitrary person much more easily than it would be for the entire world to consent to hard forking to target a single individual.
You don't know what it takes to do a fork of bitcoin. Many have tried, none have succeeded.